Reviving risk capital: The proposal to amend EuVECA and EuSEF [EU Legislation in Progress]

Written by Angelos Delivorias (4th edition),

The European Venture Capital Funds (EuVECA) and European Social Entrepreneurship Funds (EuSEF) are collective investment schemes, harmonised at EU level by means of two Regulations: (EU) No 345/2013 (EuVECA) and (EU) No 346/2013 (EuSEF). In its 2016 review, the Commission noted that these funds remain small and concentrated in a few Member States and that, while the take-up of EuVECA could be considered successful, the EuSEF results have been disappointing. To overcome the obstacles identified, it has proposed some measures that − by removing limitations on larger managers managing EuVECA and EuSEF funds, decreasing costs for EuVECA and EuSEF funds, and broadening the range of eligible assets EuVECA funds may invest in − should increase investment into these funds. The Commission’s proposal was extensively amended by the European Parliament and the Council, with regard to – among other things – initial capital requirements for those funds, minimum own funds for the funds’ managers, investor-protection provisions, as well as the powers of the European Securities and Markets Authority (ESMA). Parliament adopted the amended proposal on 14 September 2017. Council adopted the act on 9 October. The final act was published in the Official Journal on 10 November 2017, and comes into force on 1 March 2018.

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• Reviving risk capital: The proposal to amend EuVECA and EuSEF